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CEE MARKETS 1-FX rebounds on hope policymakers will act

Tue, Oct 7 2008, 07:58 GMT
http://www.afxnews.com

PRAGUE, Oct 7 (Reuters) - The Romanian leu and Hungarian

forint led a rebound in emerging European currencies on Tuesday,

after a large interest rate cut across the globe in Australia

boosted hopes that policymakers were moving to tackle the credit

crisis.

The leu jumped 1.3 percent to 3.92 versus the euro

by 0707 GMT, while the forint recovered 1.2 percent to

247.4 per euro.

Investors have raised red flags around Romania due to its

heavy exposure to foreign currency debt and wide external

deficit. Its currency lost more than 2 percent on Monday and

dealers said it looked like the Romanian central bank had

intervened indirectly on Monday to prop up the leu.

Global markets, hit by a widening financial crisis and

economic slowdown fears, got a shot of optimism from a surprise

1 percentage point interest rate cut in Australia overnight.

But dealers said sentiment was still uncertain. "The Dow has

fought back (from lows); Europe may seek to find a coordinated

solution (to the financial crisis)," said a Budapest dealer.

"Australia's rate cut keeps alive hopes that central banks in

the world may go into coordinated action ... But of course

(sentiment) can change in one minute."

In Serbia, where the central bank had to sell euros in the

market on Monday to lift the currency, the dinar stabilised at

79.2 to the euro, or 0.2 percent stronger.

The Polish zloty jumped 0.8 percent to 3.433 per

euro and the Czech crown, which has held up better due

to corporate hedging, added 0.4 percent to 24.669 per euro.

----------------------MARKET SNAPSHOT-------------------------

Currency Latest Previous Local Local

close currency currency

change change

today in 2008

Czech crown 24.669 24.775 +0.43% +6.9%

Polish zloty 3.433 3.459 +0.75% +4.65%

Hungarian forint 247.400 250.400 +1.20% +2.16%

Croatian kuna 7.123 7.121 -0.03% +2.78%

Romanian leu 3.920 3.970 +1.26% -9.49%

Serbian dinar 79.168 79.348 +0.23% -0.52%

All data taken from Reuters at 0907 CET.

Currency percent change calculated from the daily domestic

close at 1500 GMT.

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(Reporting by Reuters bureaux, writing by Jason Hovet; editing

by David Stamp)

Keywords: MARKETS EASTEUROPE/

tf.TFN-Europe_newsdesk@thomson.com

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